DXP Enterprises Inc (DXPE)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 140,077 | 95,089 | 41,016 | -27,394 | 67,717 |
| Interest expense | US$ in thousands | 53,146 | 29,135 | 21,089 | 20,571 | 19,498 |
| Interest coverage | 2.64 | 3.26 | 1.94 | -1.33 | 3.47 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $140,077K ÷ $53,146K
= 2.64
The interest coverage ratio for DXP Enterprises Inc has exhibited fluctuations over the past five years. In 2023, the interest coverage ratio stood at 2.64, indicating that the company earned 2.64 times the amount of interest expense, demonstrating its ability to cover its interest obligations with operating income. This represents a decline from the previous year, where the ratio was higher at 3.26.
In 2021, the interest coverage ratio dropped to 1.94, implying a decrease in the company's ability to cover its interest obligations with operating income compared to the prior year. Furthermore, in 2020, the interest coverage ratio was negative at -1.33, suggesting that the company's operating income was insufficient to cover its interest expenses during that period, which raises concerns about its financial health.
However, in 2019, the interest coverage ratio was relatively strong at 3.47, indicating a solid ability to cover interest expenses with operating income.
Overall, the fluctuating trend in DXP Enterprises Inc's interest coverage ratio over the past five years highlights the importance of monitoring the company's ability to meet its interest obligations and manage its debt levels effectively.
Peer comparison
Dec 31, 2023